State Farm vs Toyota

POSTED: Monday, April 12, 2010 - 8:17pm

UPDATED: Thursday, April 22, 2010 - 1:34am

Just when it seems the bad publicity is subsiding for Toyota, we get a story like this one.

Toyota sales are starting to recover nicely, thank you very much, even though the final solution to its accelerator problems hasn’t been certified.

But now, State Farm is asking for subrogation.

What that means is money and more bad press.

Subrogation means that state farm is tired of being on the hook for damage payments they feel are Toyota’s fault.

“Well, State Farm, what they’ve done is to file a class action suit against Toyota, says local insurance man Tom sorrels. “They say they’ve paid out claims based on this faulty acceleration and stopping of the runaway Toyotas.”

And Sorrells explains, they’ve already made State Farm’s case.

“They have basically admitted liability by having the recall,” he says. “We’ve paid out these claims, so basically, we’re going to subrogate and recoup our money back from the parties at fault. And in this case, State Farm is going to try to recover from Toyota.”

And the government has levied a 16.4 million dollar fine for delays in reporting .

This could end up in court and if the judge sides with the insurer, then the snowball just gathers steam .

Sorrels says, “There’s obviously something wrong out there somewhere and I think that State Farm is just the first of many to take advantage of it.”

And this comes at a time when the emails of former Communications Vice President Irv Miller have come to light asking the company to come clean and admitting they’ve got a problem and that they are not helping customers by keeping this a secret.

And Sorrells says, the results could be disastrous.

“And what would it lead to?” he asks. “It could lead to bankruptcy of Toyota, to a governmental bailout like some of the other car companies…except it would come from Tokyo.”

Whatever happens, it won’t happen soon. Lawyers for both sides will be sifting through each claim to see if it qualifies, and other than saying this happens all the time, Toyota had no further comment.

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